IDB Approves $2 Billion Credit Line to Boost Basic Sanitation in Brazil

An initial individual operation of $204 million will finance a program with the Municipality of Belo Horizonte in the State of Minas Gerais.

WASHINGTON — The Inter-American Development Bank (IDB) Board of Executive Directors has approved a Conditional Credit Line for Investment Projects (CCLIP) of up to $2 billion to improve socio-environmental, socio-economic, and health conditions in Brazil. The program will promote the universalization of basic sanitation, which includes water supply, sewage, drainage, and solid waste management, reducing regional gaps, improving environmental sustainability and climate resilience, and fostering operational efficiency and equity.

Within this credit line, the Board approved an initial individual operation of $204 million to finance a program with the Municipality of Belo Horizonte in the State of Minas Gerais.

More than 6,200 residents of vulnerable areas in Belo Horizonte will be resettled, either through compensation or access to safe housing. In addition, 47,500 people will benefit from new wastewater treatment services, and 2.5 million will be covered by early warning systems for extreme events.

The program supported by the new IDB credit line aims to reduce flood risks, increase access to improved sanitary sewer services, and strengthen the management of early warning systems in the city.

The program will support the construction of micro and macro drainage infrastructure; interventions in wastewater interceptors; urbanization projects; housing units for resettled families; as well as the rehabilitation and construction of new access roads to communities and public spaces.

It will also strengthen Belo Horizonte’s municipal administration through the modernization of the hydrological monitoring and flood early warning system and the implementation of the Urban Water Management Program, which includes updating the drainage infrastructure registry and the Master Drainage Plan.

The first operation, for $204 million, has a repayment term of 23 and a half years, a grace period of 7 years, an interest rate based on SOFR, and a local counterpart of $51 million.